American to service Rolls Royce jet engines at Alliance
Associated Press
FORT WORTH, Texas - Rolls Royce PLC has agreed to send up to $1.6 billion in maintenance work on jet engines to a facility it owns in a joint venture with American Airlines Inc., the companies said Monday.
Rolls Royce said it would send at least $900 million worth of engine work over the next five years to Texas Aero Engine Services Ltd., which is part of American's maintenance base at Alliance Airport in Fort Worth.
That work would be done at cost, officials said.
Rolls Royce said it could send an additional $700 million worth of work to the facility if the center meets its business goals, which were not detailed. The partnership would earn an unspecified profit on that extra work, officials said.
The new deal could increase the amount of work at the facility, which performed $1.2 billion in work in its first five years after opening in 1998, the companies said. Most of that work, however, was done on American's own planes, and only one-third was profitable, officials said.
The facility performs work on planes owned by other airlines, including Delta, America West and ATA, and the partners hope to lure other carriers.
"The goal is to go after new business," said Benet J. Wilson, a spokeswoman for Rolls Royce's U.S. subsidiary.
American said the deal also would help spread its costs of operating a large engine-repair and overhaul facility.
The facility employs more than 530 American mechanics and other workers, of which more than 200 were added to handle maintenance work for customers other than American Airlines. Work for those new customers has grown 75 percent over five years, American said.
David Campbell, American's vice president of maintenance for Alliance Airport and other maintenance base in Kansas City, said the deal would let the joint venture grow and provide more job security for employees.
Workers repair and overhaul the RB211 engines that American uses on its Boeing 757 fleet, and the Trent 800 engines on its Boeing 777 aircraft.
Rolls Royce said the deal announced Monday would give it four facilities to overhaul the Trent engines. The other three are in the United Kingdom and Southeast Asia.
American has revamped its maintenance bases as part of an effort to recover from near bankruptcy last year. The Fort Worth-based airline launched aggressive programs to cut costs and consolidate some of its work among its three bases at Alliance, Kansas City and Tulsa, Okla. The moves have helped free space to bid for contracts to repair engines for outside companies.
American's parent, AMR Corp., lost $1.23 billion on revenue of $17.44 billion last year amid a long slump in travel and competition from low-fare carriers.
London-based Rolls Royce is the world's second-largest maker of aircraft engines, behind General Electric. It makes engines for military, commercial and corporate planes and helicopters and marine engines and power-generation products and had revenue last year of $9.28 billion.
Rolls Royce cars, however, are now made by German automaker BMW.
Associated Press
FORT WORTH, Texas - Rolls Royce PLC has agreed to send up to $1.6 billion in maintenance work on jet engines to a facility it owns in a joint venture with American Airlines Inc., the companies said Monday.
Rolls Royce said it would send at least $900 million worth of engine work over the next five years to Texas Aero Engine Services Ltd., which is part of American's maintenance base at Alliance Airport in Fort Worth.
That work would be done at cost, officials said.
Rolls Royce said it could send an additional $700 million worth of work to the facility if the center meets its business goals, which were not detailed. The partnership would earn an unspecified profit on that extra work, officials said.
The new deal could increase the amount of work at the facility, which performed $1.2 billion in work in its first five years after opening in 1998, the companies said. Most of that work, however, was done on American's own planes, and only one-third was profitable, officials said.
The facility performs work on planes owned by other airlines, including Delta, America West and ATA, and the partners hope to lure other carriers.
"The goal is to go after new business," said Benet J. Wilson, a spokeswoman for Rolls Royce's U.S. subsidiary.
American said the deal also would help spread its costs of operating a large engine-repair and overhaul facility.
The facility employs more than 530 American mechanics and other workers, of which more than 200 were added to handle maintenance work for customers other than American Airlines. Work for those new customers has grown 75 percent over five years, American said.
David Campbell, American's vice president of maintenance for Alliance Airport and other maintenance base in Kansas City, said the deal would let the joint venture grow and provide more job security for employees.
Workers repair and overhaul the RB211 engines that American uses on its Boeing 757 fleet, and the Trent 800 engines on its Boeing 777 aircraft.
Rolls Royce said the deal announced Monday would give it four facilities to overhaul the Trent engines. The other three are in the United Kingdom and Southeast Asia.
American has revamped its maintenance bases as part of an effort to recover from near bankruptcy last year. The Fort Worth-based airline launched aggressive programs to cut costs and consolidate some of its work among its three bases at Alliance, Kansas City and Tulsa, Okla. The moves have helped free space to bid for contracts to repair engines for outside companies.
American's parent, AMR Corp., lost $1.23 billion on revenue of $17.44 billion last year amid a long slump in travel and competition from low-fare carriers.
London-based Rolls Royce is the world's second-largest maker of aircraft engines, behind General Electric. It makes engines for military, commercial and corporate planes and helicopters and marine engines and power-generation products and had revenue last year of $9.28 billion.
Rolls Royce cars, however, are now made by German automaker BMW.
